Tag Archives: Obamacare

After seven years of bombast and bluster, the Republicans have shown they have no idea how to repeal and replace Obamacare. The problem for Republicans is that they were trying to fix the wrong thing. The misnomer is that Obamacare is a government healthcare plan. It is not. Medicare and Medicaid are government health plans, but Obamacare is nothing more than a government sponsored effort to help an insurance company market policies to individuals who do not have access to healthcare; either from their employer or an existing government program. (About 10 percent of the population.) Obamacare also expanded an existing healthcare system — Medicaid – in order to provide coverage for millions of low income individuals who could not afford private policies, under any conditions.

To achieve its primary objective, Obamacare created an “exchange,” in the form of a government website for insurance companies to list and market their policies. It is much like Amazon where companies list the products they want to sell and consumers go online to buy them. Obamacare is not government insurance, but rather private insurance offered on a government website.

In order to list their policies on the “exchange” insurance companies had to agree to issue coverage to anyone who applies, regardless of their current health or pre-existing conditions. In addition, companies could not put a “cap” on the size of any claim and (unlike most private policies) they had to offer expanded coverage for preventive care, mental health and substance abuse treatment.

This was all good for the insured, but the insurance companies – that are after all in business to make a profit – blanched at these costly requirements. The insurance companies argued that such requirements were not “actuarially sound” and, in fact, guaranteed losses, regardless how much premium was charged.

In response, the government made two promises to the insurance companies: Everyone who did not have health coverage from another source would be “mandated” to buy a policy. This would “spread the risk” and create stability. (Not everyone who bought a policy would have a claim.) In addition, the government guaranteed to reimburse the companies for any losses they might incur by participating in Obamacare. (What company would not want to participate when the government did the marketing of the policies and guaranteed to cover the losses?) Beyond that, the government agreed to subsidize premiums for those who could not afford what the companies were charging.

So what was intended to be a simple process of connecting customer and company to provide individual health insurance via the Internet turned into a complicated, confusing and cumbersome plan that satisfied no one. While it is true that since the inception of Obamacare over 22 million previously uninsured Americans have been able to access health coverage, the vast majority of the newly covered resulted from the simple step of reducing the bar for lower income and the poor to be covered under Medicaid.

Those opposed to Obamacare argue that it is in a “death spiral” and that it will soon collapse. They point to escalating premiums and suggest the individual market is melting down because more and more companies are withdrawing from Obamacare. They are right about all this, but it is a man-made not structural problem. Ever since the Republicans took control of Congress and now the White House, they have been threatening to repeal the “individual mandate,” eliminate subsidies to individuals and de-fund the government’s promise to subsidize insurance company losses. Insurance companies need market stability to properly price the policies to make a profit, so no wonder that under these threats they are withdrawing from Obamacare. (How many companies would continue to offer their products on Amazon if Amazon had requirements that guaranteed losses with each sale?) Because of the uncertainty of the rules going forward, insurance companies have only two options: significantly increase existing premiums and refuse to issue new policies.

REPEAL AND REPLACE OBAMACARE

Obamacare was never the best way to assure that all Americans, regardless of their income or status in life, receive basic healthcare. And there is a better way to achieve this objective, without having to reinvent the wheel. It is a proven solution that is right in front of us.

Medicare and Medicaid have provided millions of Americans with efficient and effective healthcare for decades. If the objective is to assure all Americans – regardless of income or age – the right to basic healthcare coverage (as it should be) the simplest, most effective and least expensive way to do so is by merging Medicare and Medicaid into one program that could provide basic healthcare for all Americans from birth to death. This could not happen overnight, but it could be phased in over the next decade.

Critics argue that the cost of such an approach would be daunting, but by basing premiums, deductibles and co-pays on the basis of means and by diverting monies expended in the current patchwork health care system, the costs would not only be manageable, but less than what is being spent now. Besides, if we can spend $2.4 trillion on wasted wars in Iraq and Afghanistan shouldn’t we be willing to invest in the good health of all Americans? Such a program of universal healthcare would not be “government provided” care, but rather government payment for the services of private providers; just as Medicare and Medicaid do today.

It may surprise you that one well-known politician has long favored this approach to healthcare. In his book The America We Deserve he wrote, “We must have universal health care… Our objective should be to make reforms for the moment and longer term, to find an equivalent of the single-payer plan …” In multiple interviews and public comments over the years he has consistently endorsed the right of all Americans to receive basic health care coverage. In February of this year, he praised Australia’s health care system, saying to the Australian prime minister, “You have better health care than we do.” Of note is that Australia has a universal health care plan that is modeled after American Medicare and even called Medicare. Of course the individual referred to here is none other than Donald Trump.

Medicare and Medicaid provide access to efficient, effective healthcare for millions of Americans, so rather than constantly haggling over fixing failure, why not build on the proven success of established programs that could provide healthcare for all Americans?

At a campaign rally in January, 2016, in reference to the blind loyalty of his followers, Trump said, “I could go out on 5th Avenue and shoot someone and I would not lose any votes.” The media (even Fox News) scoffed at his exaggeration, but it turns out that Trump was not that far off. After a tempestuous campaign, an erratic transition period and two months of an administration that could best be compared to bareback bull riding, Trump followers are, if anything, even more hypnotic in their support for him. Even when Trump makes things up from the vapors of his own peripatetic mind, his followers accept them as gospel.

Before we go further, let me acknowledge that I voted for Trump. I did so out of the belief that the establishment status quo was in need of some uncomfortable disruption and Trump was the only “disrupter” in the field of candidates. What I did not vote for was what Trump’s alter ego, Steve Bannon, described as the “deconstruction” of the pillars and institutions of the American government. You make a sick patient better by curing him, not killing him.

Even the most casual observer can see that the early days of the Trump administration have been a full-frontal assault on the fundamental institutions of government – the judicial, legislative and executive branches. At the same time, there has been a concerted effort to consolidate the levers and power of government within the walls of the White House (via Executive Order); much like role model Putin has done in the Kremlin. This attitude was vividly postulated by the wannabe Nazi Youth Leader Steve Miller, the White House advisor and Bannon buddy, who said in a television interview, “that the powers of the president to protect our country are very substantial and will not be questioned.”

And now of course, there is the broken promise to “replace and repeal” Obamacare. After seven years of repeated blood-promises by Republican Congressional leaders and multiple campaign pledges by Trump that if elected, Obamacare would be immediately“repealed and replaced,” that has not happened. After a cartoonish effort failed to fulfill the promise, we are now told, “Obamacare is the law of the land for the foreseeable future.” A lot of excuses have been offered up to explain the failure of the Republican AHC plan, but the bottom line is that this is a failure of leadership and inability to “make a deal.” Leadership and deal making starts at the top.

Then there is the blinding sandstorm of the “Trump-Russian affair.” There may be nothing to the suspected improper contacts – and maybe even collusion – between the Trump campaign and elements of the Russian government, but the circumstantial evidence that has emerged, combined with Watergate-like actions to obfuscate this activity, raises high suspicion. When was the last time so many American officials had so many behind the scenes contact with so many Russian officials?

Under normal circumstances this type of stumbling, bumbling, incoherent start to leadership, would spell doom for any leader at any level, let alone one who is president of the United States, but these are not normal times. The reality is that while Trump’s already low approval rating has declined further, his popularity among the vast majority of those who voted for him is even higher. Indeed, Trump backers want to believe that all of these issues are nothing but a wide conspiracy launched by those in the “deep government” that is intended to besmirch Trump and his agenda.

So what is it that blinds Trump’s die-hard followers to any of his foibles, fabrications and failures? The reality is that Trump followers have “special needs” and he is the only one who has promised to respond to them.

The Lost Generation

The core backers of Trump are part of what could be called the “lost generation.” For virtually their entire lives they have experienced a steady erosion of what has been generically referred to as the “American Dream.” The ideal of the American Dream was that everyone had an equal opportunity to achieve success and financial security through hard work, determination and individual initiative.

From the perspective of the Trump voter they have seen and felt the impact of the American Dream being dismantled step by step. They have seen “globalization” siphon jobs overseas; jobs being lost to immigrants (legal and illegal), their own wages have stagnated or even declined. They have witnessed vast amounts of wealth concentrated in the hands of the few and have suffered from the destruction of the great American middle-class. Not only has the core Trump supporter felt the loss of opportunity, but, even more important, they feel powerless and voiceless against a government that seems designed to work against them and the elite wealthy who do not care about them. Is it any wonder they are frustrated and distrustful of the establishment?

Then along comes Trump

Give Donald Trump credit. Of the 20-plus individuals who ran for president in 2016, Trump was the only one to recognize, understand, enumerate and connect with the frustration, pain and special needs of millions of Americans. He not only promised to give these individuals a voice, but that he would, “Make America Great Again.” That was a “code phrase” signaling that he would take the country back to the way things were when the American Dream was alive and well. It was, for these people, an irresistible clarion call.

This was like someone who had never been loved, being told that someone loved them. When someone is starved for love and believes they have found it, little else matters. The one being offered love is willing to blindly ignore any flaws, foibles, fabrications or even the insincerity of the one offering love. This is the case with the die-hard Trump supports.

Unapologetic Trump supporters do not care if he is impulsive, off-the-cuff, an admitted misogynist or one who plays fast and loose with facts and the truth. Trump’s core supporters couldn’t care less if Russia attempted to influence the election or if members of his staff (most likely with his knowledge) colluded with the Russians to fix the election. Even when Trump blames the Democrats for blocking the repeal of Obamacare – even though they had no power to do so – his followers believe him. The bottom line is that Trump has promised those who are frustrated and disenfranchised from the establishment that he will make right the wrongs they have suffered; and that is all they care about. And you really can’t blame them.

If Love is Lost

This is all well and good. It is easy to empathize with those who have been left behind by a rapidly changing economy and world order. One can understand why they would gravitate to the promises of Trump. But what if he ultimately fails to deliver? In the end, even more serious problems and frustrations could arise if, for whatever reason, Trump is unable to deliver on the promises he has made to “Make America Great Again.”

No doubt about it, the healthcare system in America is a mess. Obamacare is not working as intended and the proposed Republican replacement is being castigated, even by Republicans, as potentially even worse. Democrats complain the American Health Care Act (ACA) takes too much away from people who need coverage the most. Republicans who oppose the ACA call it “Obamacare-lite” and complain it does not go far enough to repeal Obamacare; and that it creates an entirely new entitlement program.

The reality is that resolving the healthcare challenge is simple, but it is made complex because Republicans and Democrats have diametrically divergent views on what the end result should be. In simple terms, the Republicans believe the answer lies in assuring that all Americans have “access” to healthcare coverage, while the Democrats believe the answer lies in assuring that all Americans actually have healthcare coverage. There is a big difference between having access to healthcare coverage that an individual needs but cannot afford and providing the needed coverage, regardless of the ability to pay.

This difference exists because the political leaders have failed to address and resolve the most fundamental healthcare question: Is basic healthcare a right or a privilege?

The Republicans believe that healthcare is a privilege, and thus, so long as there is universal access to healthcare coverage (no matter what form or price), the problem is solved. (It should be noted that prior to becoming president, Trump consistently argued that healthcare coverage is a right.) On the other hand, Democrats take the position that every American citizen, regardless of financial status, has a right to receive basic healthcare.

It is this philosophical difference that motivates the Republicans (believing healthcare is a privilege) to propose in the ACA that Medicaid (the state/federal plan that covers low income citizens) funding be slashed. (This is one of the chief reasons why the Congressional Budget Office estimated that as many as 24 million Americans will lose their coverage under the Republican plan.) Conversely, (believing that healthcare is a right) the Democrats used Obamacare to expand Medicaid that covered 15 million people who previously could not afford coverage of any type.

There can be no effective bipartisan agreement on the best form of a healthcare system, unless or until there is a debate and resolution of the question as to whether healthcare is a basic right of every American citizen or a privilege based on means to pay. If, as a society, we decide that healthcare is indeed a privilege, then the Republican ACA plan will work just fine. If, we as a society decide (as virtually every other industrialized nation has) that basic healthcare, like a basic education, is a natural right of every American citizen, then we can work together in a bipartisan way to find the best way to achieve that goal.

Repeal and Replace Obamacare

Ironically, if it is decided that healthcare is a basic right, it would call for the repeal and replacement of Obamacare, because it has failed to achieve the objective of covering all Americans. But such a replacement would be based on the rights of all, rather than the privilege of a few to have healthcare.

If this approach to repealing and replacing Obamacare is taken, the solution is right in front of us. It is a healthcare system already in operation. It has proven to be effective and efficient; it has high consumer satisfaction and acceptance. Maybe even more important, it is a plan that President Trump has endorsed and pledged to protect.

Taking the complexity out of the healthcare solution.

The simplest and most effective way to solve the healthcare crisis is to merge the Medicare and Medicaid systems into one program that, on a phased in basis, will provide basic health care services to every American citizen, regardless of age, social status or income.

There would be no need to create another bureaucracy. Both of these programs have processes and procedures in place and in point of fact are paying for the health services provided by clinics, hospitals and doctors for millions of Americans age 65 and over, along with millions more of low income citizens. Patients covered by Medicare are free to select any of the 95 percent of the doctors, clinics and hospitals that accept Medicare payments. This is not the government deciding or providing the healthcare, but simply being the “single payer” of the benefits provided.

Of course merging and expanding Medicare and Medicaid into a universal healthcare system can’t be done with a flip of a switch, but an organized phase-in of this system over time for those not currently covered under Medicare or Medicaid could smooth the way. This would allow for Obamacare, along with all other forms of healthcare such as individual and employer group plans, to be repealed and phased out at the same pace the new system is expanded.

Certainly there will be concerns about the cost of such a change, but a number of serious studies have concluded that diverting all expenditures on the current system (federal, state, individual and employer) toward this new system and combining this with premiums, deductibles and co-pays based on income, would create more efficiency and actually be less costly than the current system. President Trump has even made this point in interviews.

Using this approach to fixing the healthcare system could be a win-win for everyone. Trump and the Republicans could fulfill their campaign pledge to repeal and replace Obamacare; Trump could remain consistent in his call for universal healthcare and his pledge to protect Medicare and, most important, all Americans could finally join the millions of citizens of every other industrialized nation in the world for whom basic healthcare is a right of citizenship, not just a privilege for the wealthy.

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This was true of the great empires. They all learned, for better or sometimes worse, that individuals and institutions can make prodigious contributions to history by shaping the future, but when they failed to continue to make history, they became history: We know them now for what they did, not what they are doing.

ABOUT BOB MacDONALD

Founder of LifeUSA Insurance and retired CEO of Allianz Life, N.A., Bob MacDonald regularly blogs with timely, hard-hitting comments on almost every business subject from entrepreneurism to better management, smart business leadership, government and politics, and of course, the life insurance industry.

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Bob MacDonald, founder of LifeUSA Insurance and retired CEO of Allianz Life, N.A., regularly blogs with timely, hard-hitting comments on almost every business subject from entrepreneurism to better
management, smart business leadership, government and politics, and of course, the life insurance industry.